Privately controlled Schaeffler is gearing up for a public listing in Frankfurt. It said it will place up to 166 million new and existing non-voting common shares of Schaeffler AG with institutional investors and to list these shares on the Frankfurt Stock Exchange.
The move is being viewed as part of an effort to pay down debt incurred by Schaeffler’s failed attempt to take control of Continental.
Schaeffler did not say how much it planned to raise but some estimates suggest it could generate as much as EUR2.5bn. The proceeds will be used to reduce financial indebtedness on both the level of Schaeffler AG and Schaeffler Holding.
“The planned listing is a strategic step to further reduce our indebtedness and to improve the capital structure,” Klaus Rosenfeld, chief executive, said in a statement. “We thus obtain further financial flexibility to seize additional growth opportunities.”
The bookbuilding process is scheduled to start at the end of September, with the first day of trading anticipated in Frankfurt in October.
The public listing follows the damage to Schaeffler’s balance sheet caused by its debt-financed takeover of Continental in 2008. After the international financial crisis Schaeffler was left saddled with debt and has since cut its Continental stake to 46%.
The company plans to retain 100 per cent of the voting shares following the listing and the company said that Schaeffler would “remain a family business in the future”.